Asking for 35% off rent

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    Asking for 35% off rent

    Hi. I am a fairly new landlord and I only own one property. About a month ago I reached out to my tenants asking if they were okay and if they wanted to get in contact with me please do. Three days later they contacted me to ask for a massive reduction in the rent asking for 35% off. I have no issues helping people who need it in this crisis. And I’m the one who reached out to them initially. But upon looking at the credit checks that were done they are very high earners. The lead tenant earns over £45,000 a year and she still has her job. Her boyfriend is asking for the biggest reduction & he has savings worth £15,000.00 back in South Africa. He may have more for all I know. He did not pass the credit check and so he supplied a copy of his bank account that had the savings in it. That’s the only reason I know about it. The third tenant who is their best friend was unemployed at the time but he was just finishing his graduation as an architect and assured me that he would be employable. As he did not pass the credit check it was required that he had a guarantor. I was told that his parents were filthy rich By the other two tenants prior to signing the contract. His parents live abroad so they could not be the guarantor. His guarantor (a family member in the uk) earns £75,000 a year. I have asked for evidence from them saying that I would consider their proposal and I wanted to help. But after looking at all of the paperwork, they are not People in need. I’ve never earned over 25K in my entire life. The only reason I’m letting this flat out is because I became very ill and it was on the fourth floor without a lift and I could no longer live in it. It’s a shared ownership so I only own a percentage of it and the housing association has officially agreed that I can let it out in hope that my health improves And I Can return. I have been unable to work and my sole income is from the rent from that property. I am not rich. As a matter fact I’m eating hand to mouth. I don’t have coffee out I’m terribly frugal with my money just in order to get by. If I were to reduce the rent by 35%, I wouldn’t even be able to make the payments on the mortgage, the loans, The service charges, and the rent that I have to pay the housing association on the portion of the property that I don’t own.On top of that, of course there are insurances, boiler checks, et cetera et cetera. I feel like I’ve got a gun to my head. If I say no they can just threaten to leave and then I have no income at all. Unfortunately, I allowed it to roll over Instead of renewing the contract. I’m at a loss what to do. As stated, the lead tenant is in full employment earning over 45 grand a year. Her boyfriend lives in the same bedroom with her and he is wanting a 50% reduction. He is self-employed and will be entitled to the 80% plus he will be entitled to some kind of housing benefit to make up the rest of it won’t he? The tenant that was a student and subsequently employed as an architect has a guarantor. In actuality, according to the contract that guarantor has signed for the entire contract. So technically he is responsible for any rent not paid. And I took the chance with this guy as he promised me that he would be able to make the rent and the only way I allowed him to be a tenant is because he had a guarantor. So what’s the point of having a guarantor if he is now going to try to negotiate his rent down? I’ve been racking my brain. I am happy to give them a rent holiday for the next month for the two people who became unemployed. And to review things after that,But that will cause problems as well. I may never see that money again. And the reality is that both of those Tenants have access to savings and family funds and There is a guarantor which I’m sure they are not going to want to make him responsible but which I have the full right to require the funds from him. My thinking is that they have to sign a new contract & I will lower the rent enough to help them bounce back from this month. That way both of us would be protected. The problem with that is I seriously doubt his guarantor is going to sign the contract now under certain circumstances. Any advice would be most welcome. I am not your typical landlord with lots of properties and In fact this property is my sole income at the moment. Kind regards

    #2
    Welcome Lillylisa.

    I would simply decline their request. You are under no obligation to reduce the rent.
    The tenants are simply taking the mickey.

    If they want the rent reduced for a short period and then to pay increased rent to pay you back, that's one thing, but I would be saying no.
    If the tenants have savings they're simply asking you to spend your money instead of spending there own.

    They won't be leaving in this crisis, because finding a new property will be close to impossible.

    You're going to need to address the situation shortly though, because the main reason that they won't be able to find a property is that there is almost no rental property in England and Wales let to three people (or a couple and a third person).
    The property is an HMO and there is a lot of regulations that apply to an HMO that don't apply to other rental property.
    It is very unlikely that a normal residential flat meets the regulations without modification.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Originally posted by jpkeates View Post
      I would simply decline their request. You are under no obligation to reduce the rent.
      The tenants are simply taking the mickey.
      I totally agree with JP, though I am worried about this UK based guarantor, do you actually have a signed and witnessed deed of guarantee from this person?

      Just as an aside, your post is long. Many people may not be willing to read through it, so will not help. You might want to edit it to summarise what help/info you need.

      Comment


        #4
        There is no deed. He is named on the rental contract 6 month short hold tenancy agreement as being responsible along with the 3 tenants. I will edit my post. Thank you.

        Comment


          #5
          To be clear: the guarantor signed the contract which has a section called The Guarantor which clearly lays out his/her legal liabilities. In this case, he is liable for all the rent not just for his nephews. I’m sure they would not want this to fall to him. They have been very good tenants so far. Just think they are being opportunists. I can understand that it’s scary for them but they knew what they were getting into & they do have money. They still haven’t got any proof to me. Maybe they having second thoughts after I explained my situation? Though when I asked if they wanted to give me a call to discuss it, they refused saying they wanted everything in writing as if we are in a dispute.

          Comment


            #6
            Ps I’m unable to edit the original. Sorry so long winded. I have a visual impairment & have to use voice dictation. It’s awful!

            Comment


              #7
              Originally posted by Lillylisa View Post
              There is no deed. He is named on the rental contract 6 month short hold tenancy agreement as being responsible along with the 3 tenants. I will edit my post. Thank you.
              Then unfortunately, you will have difficulty enforcing the guarantee (unless your guarantor is named as a tenant or the tenancy agreement is executed as a deed). The reason for that is because

              https://www.inbrief.co.uk/contract-law/contracts/

              A valid contract requires the presence of three elements:
              With your tenancy agreement
              • You give the tenants a tenancy, they give you rent (consideration)
              • Guarantor supplies you with a guarantee, you give him/her . . . (no consideration)
              Hopefully, it won't be a problem, as you say, the tenants should be well able to pay the rent, but just beware.

              Comment


                #8
                Originally posted by Lillylisa View Post
                To be clear: the guarantor signed the contract which has a section called The Guarantor which clearly lays out his/her legal liabilities. In this case, he is liable for all the rent not just for his nephews. I’m sure they would not want this to fall to him. They have been very good tenants so far. Just think they are being opportunists. I can understand that it’s scary for them but they knew what they were getting into & they do have money. They still haven’t got any proof to me. Maybe they having second thoughts after I explained my situation? Though when I asked if they wanted to give me a call to discuss it, they refused saying they wanted everything in writing as if we are in a dispute.
                This is not likely to be valid or easy employed. It does not sound like a deed. What witnesses were there? How many witnesses and who were they? Do you have proof of ID for the Guarantor and witnesses?

                But yes, they are most likely chancers using the law to try to diddle you.

                Just say no, sorry.

                PS - it's not so much the length of your post - but that you have no paragraphing

                Comment


                  #9
                  [QUOTE=AndrewDod;n1101127]

                  This is not likely to be valid or easy employed. It does not sound like a deed. What witnesses were there? How many witnesses and who were they? Do you have proof of ID for the Guarantor and witnesses?

                  But yes, they are most likely chancers using the law to try to diddle you.

                  Just say no, sorry.

                  PS - it's not so much the length of your post - but that you have no paragraphs

                  Comment


                    #10
                    I went through Open Rent Who drew up the contracts. Surely, they wouldn’t be drawing up contracts which are not legally binding as they are a massive company and their paid service is for them to draw a legally binding rental agreement. So are you saying they’ve not drawn up a legally binding document? If that is the case, then they need to refund me the money I paid them to draw up the contract. That’s not gonna help with the situation. Shall I upload a photo obviously deducting any personal information so you can see what is in the contract?

                    Comment


                      #11
                      Also, I paid for an insurance policy for loss of rent but they now say that I have to first serve an eviction notice before they will cover it. Of course I’m unable to do that right now. My main concern is that There is a guarantor. Surely they should be liable. Of course I do not want to go back to the guarantor as I think that the tenants actually do have the money. That poses another question if I did just need to evict them because of loss of income, how would the courts look on this when one of the tenants, who is named as the lead tenant, is still earning £45,000 a year, and one tenant clearly has demonstrated he has savings, and they have a guarantor. The woman earning 45 grand a year Has a credit score of 999, basically the best you can get, surely she’s not going to want to risk that credit score being damaged? I believe that the couple are probably saving money to buy a flat which is why they opted to share a bedroom in a not so big flat. Surely, they’re not going to want Any court judgements on their file?

                      Comment


                        #12
                        You have been told the answer, no.
                        what does it matter how much anybody earns?

                        Ask them provide evidence that they are being made redundant and advice they can apply to universal credit

                        Btw be warned that the rents could fall.

                        Comment


                          #13
                          The validity of the guarantor only matters if you want them to pay something and they say no.
                          But we're getting massively ahead of ourselves, talking about guarantors and eviction.

                          You offered the tenants help, they have asked for a massive reduction in rent.
                          I would simply say no, if you can't afford it.

                          If you can afford it for a while, you could agree to the reduction on the basis that after three months the tenants will pay the reduced amount back over the next three months.

                          Because the property is being run as an HMO and doesn't seem to be set up as one, once the current crisis is over, you are probably going to have to address that issue anyway.
                          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                          Comment


                            #14
                            To JpKeates. I agree with you. I can maybe reduce rent by a bit & some as a rent holiday, (not exactly a holiday!) How does one draw up a contract for that? And would it be wise or not to have a new AST agreement made up? Problem is guarantor would not sign it now, and I’d rather keep him in place. but they are clear they want a substantial reduction which I’m not willing to do. FYI : The Guarantor signed the AST contract making him equally responsible for the rent: https://help.openrent.co.uk/hc/en-gb...rent-contract-

                            Comment


                              #15
                              Originally posted by Lillylisa View Post
                              How does one draw up a contract for that? [/URL]
                              Why would one want to?

                              Comment

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